Legislature(2017 - 2018)SENATE FINANCE 532
05/11/2017 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB79 | |
| HB111 | |
| SB34 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 79 | TELECONFERENCED | |
| += | HB 111 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 34 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
May 11, 2017
9:12 a.m.
9:12:53 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:12 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Shelley Hughes
Senator Peter Micciche
Senator Donny Olson
Senator Natasha von Imhof
MEMBERS ABSENT
None
ALSO PRESENT
Doctor Jay Butler, Chief Medical Officer, Division of
Public Health, Department of Health and Social Services;
Sara Chambers, Deputy Director, Division of Corporations
Business and Professional Licensing, Department of
Commerce, Community and Economic Development; Laura Cramer,
Staff, Senator Anna MacKinnon; Juli Lucky, Staff, Senator
Anna MacKinnon; Senator Cathy Giessel; Representative Lora
Reinbold.
PRESENT VIA TELECONFERENCE
Marla Thompson, Director, Division of Motor Vehicles,
Department of Administration; Dan Lowden, Captain, Alaska
State Troopers; Sheldon Fisher, Commissioner, Department of
Administration; Brian Duffy, Director, Division of
Administrative Services, Department of Military and
Veterans Affairs; Michael Stanker, Attorney, Department of
Law.
SUMMARY
SB 34 DRIVER'S LICENSE & ID CARDS & REAL ID ACT
SB 34 was HEARD and HELD in committee for further
consideration.
SB 79 OPIOIDS;PRESCRIPTIONS;DATABASE;LICENSES
SB 79 was HEARD and HELD in committee for further
consideration.
CSHB 111(FIN)(efd fld)
OIL & GAS PRODUCTION TAX;PAYMENTS;CREDITS
CSHB 111(FIN)(efd fld) was HEARD and HELD in
committee for further consideration.
SENATE BILL NO. 79
"An Act relating to the prescription of opioids;
establishing the Voluntary Nonopioid Directive Act;
relating to the controlled substance prescription
database; relating to the practice of dentistry;
relating to the practice of medicine; relating to the
practice of podiatry; relating to the practice of
osteopathy; relating to the practice of nursing;
relating to the practice of optometry; relating to the
practice of veterinary medicine; related to the duties
of the Board of Pharmacy; and providing for an
effective date."
9:14:56 AM
DOCTOR JAY BUTLER, CHIEF MEDICAL OFFICER, DIVISION OF
PUBLIC HEALTH, DEPARTMENT OF HEALTH AND SOCIAL SERVICES,
(DHSS) explained the reason for the legislation. He shared
that more than 90 Alaskans died of an opioid overdose the
year prior, which was more than twice the number of
Alaskans who died of AIDS at the peak of the HIV epidemic.
He stated that an opioid overdose represented nearly one in
every forty deaths that occurred in the state the year
prior. He shared that two-thirds of those deaths involved a
prescription opioid. He remarked that the majority of those
people who use heroin and other illicit opioids report that
they first became addicted using prescription opioids. He
stressed that often the opioids were obtained from a
trusted and well-meaning health care provider. He stressed
that the state was responding to the opioid epidemic
through community coalitions, citizen action, and state
government. He shared that SB 91 was passed and signed into
law in March 2017, which authorized increased access to the
life-saving drug Naloxone.
Co-Chair MacKinnon acknowledged Senator Giessel's
participation in the bill process.
9:16:59 AM
Dr. Butler echoed stated that there were many people who
were saved by the Naloxone kits. He remarked that the kits,
however, did not address some of the underlying issues
surrounding the opioid epidemic. He stated that the kits
did not support those in recovery who wanted to maintain
their sobriety. He remarked that the kits also did not
address some of the underlying factors in the increase of
opioid use and addiction.
9:33:19 AM
Senator von Imhof wondered what happened to the reports,
and what occurred with a pattern and whether there was
action on those trends. Dr. Butler replied that the intent
of the bill was for authorization for the Department of
Commerce, Community and Economic Development (DCCED) to
issue the report card. He stressed that there was currently
no legal authority to issue that report. He stated that the
information to the provider was solely for that provider.
Senator von Imhof surmised that the bill would create a
database that showed all the prescriptive drug behavior for
all health care providers in the state. Dr. Butler replied
that there would not be a new database, but enhancing the
existing database. He stated that the database was for
controlled substances only.
9:36:22 AM
Senator Hughes expressed concern about the opioid epidemic
in the state. She wanted to ensure that the bill was
addressed the real problem. She felt that there might be "a
few bad apples" in the state who were over-prescribing. She
remarked that the Division of Public Health did not have
the authority to forward names to the board, but rather
could only recognize trends. She wondered whether the data
showed that most prescribers were contributing to the
problem, or was it only a few prescribers. She wondered
whether the suspicious activity should be investigated, and
then forward that information to the appropriate boards.
Dr. Butler agreed that there were remarkable efforts and a
robust recovery community in the Mat-Su. He stated that the
broader nationwide data showed that more than half of the
prescribed opioids came from primary care providers. He
stated that the authority to pursue problematic providers
was within the boards in DCCED.
9:42:16 AM
Senator Hughes wondered whether the various boards could
look at the Prescription Drug Monitoring Program (PDMP) to
determine the outliers. She understood that the boards did
not have that authority. Dr. Butler replied that there was
an issue with staffing. The PDMP manager was currently in
recruitment. He stated that there were red flagged criteria
for behavior related to the number of prescribers and the
number of pharmacies visited over a set period of time.
Senator Hughes felt that there needed to be an examination
of the over-prescribers that were shown in the database.
She wondered whether there needed to be a specific name
assigned in the database, rather than locations and trends.
Dr. Butler deferred to Ms. Chambers.
9:45:08 AM
SARA CHAMBERS, DEPUTY DIRECTOR, DIVISION OF CORPORATIONS
BUSINESS AND PROFESSIONAL LICENSING, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, responded
that the boards were recently given authority to get the
high-level trending non-specific information, and authority
to issue license discipline if the prescription drugs were
not used within generally safe practices. She agreed that
that the boards did not have the ability to view the PDMP
and transmit the information on a specific prescriber,
unless there was a subpoena. She stated that the
legislation expanded the ability to provide information,
through a subpoena, to a law enforcement agency. She
stressed that the PDMP was not currently used as a punitive
investigative tool, but remarked that it could change with
a policy change.
Senator Hughes surmised that the board could only pursue an
individual person after a filed complaint. She wondered
whether the courts were ever used in investigating a
complaint. Ms. Chambers replied in the affirmative.
Senator Hughes hoped that there would be a report to see
whether the PDMP manager could have greater investigative
authority.
Senator Micciche felt that the most valuable aspect of the
bill was the daily prescription limit. He queried more
information about the four-day and seven-day limits. He
remarked that there was data showing that a ten-day
prescription could result in addiction. Ms. Chambers
replied that the Optometry Board currently had a four-day
limit in statute, so that board was not included in the
bill. She stated that the seven-day limit extended to all
other practitioners, except for veterinarians.
Senator Micciche felt that the limit could be successful.
9:52:20 AM
Vice-Chair Bishop wondered whether the bill would be
addressed in the afternoon. Co-Chair MacKinnon replied in
the negative.
Vice-Chair Bishop queried the background of opioids. Dr.
Butler responded that opium had been used medicinally for
thousands of years. He remarked, however, that opium had
been known to result in addiction and physical dependency
for thousands of years. He stated that there was approval
in the 1990s that were introduced.
Co-Chair MacKinnon discussed committee business.
Senator Olson requested more information about the boards.
Co-Chair MacKinnon CLOSED public testimony.
SB 79 was HEARD and HELD in committee for further
consideration.
10:00:36 AM
RECESSED
2:18:10 PM
RECONVENED
CS FOR HOUSE BILL NO. 111(FIN)(efd fld)
"An Act relating to the oil and gas production tax,
tax payments, and credits; relating to interest
applicable to delinquent oil and gas production tax;
relating to carried-forward lease expenditures based
on losses and limiting those lease expenditures to an
amount equal to the gross value at the point of
production of oil and gas produced from the lease or
property where the lease expenditure was incurred;
relating to information concerning tax credits, lease
expenditures, and oi l and gas taxes; relating to the
disclosure of that information to the public; relating
to an adjustment in the gross value at the point of
production; and relating to a legislative working
group."
2:18:49 PM
Vice-Chair Bishop MOVED to ADOPT the committee substitute
for CS SBHB 111(FIN)(efd fld), Work Draft 30-LS0450\B
(Nauman, 5/10/17).
Co-Chair MacKinnon OBJECTED for discussion.
Co-Chair MacKinnon stated that the CS eliminated the
state's cash exposure by ending the program of refundable
oil and gas tax credits to small or new companies. She
stated that work after 2017 would no longer be eligible for
cash credits. The only credits remaining statewide would be
those in Middle Earth, and those would be nonrefundable.
She stated that it would conclude a multiple year effort to
phase out the credits that began in 2013. The bill provided
opportunities to reduce the credit backlog, which following
two years of vetoes by the current administration.
2:23:35 PM
LAURA CRAMER, STAFF, SENATOR ANNA MACKINNON, explained the
committee substitute with the Sectional Analysis (copy on
file):
Section 1 Amends AS 31.05.030(n), Alaska Oil and Gas
Conservation Act, Powers and duties of commission.
Conforming to the Sec. 28 requirement that the Alaska
Oil and Gas Conservation Commission determine the
start of regular production for purposes of applying a
carry-forward annual loss.
Section 2 Amends AS 43.05.225, Administration of
Revenue Laws, Interest.
For all delinquent taxes under the Department of
Revenue, interest is three points above the annual
rate set by the 12th Federal Reserve District,
compounded quarterly, and is applied the entire time a
tax is delinquent.
Section 3 Amends AS 43.20.044(a), Alaska Net Income
Tax Act, Exploration incentive credit
A taxpayer that earns an exploration credit under AS
43.55.025 for work done after July 1, 2016, may apply
the credit against the taxpayer's own corporate income
tax. Effective immediately.
Section 4 Amends AS 43.20.047(h), Alaska Net Income
Tax Act, Liquefied natural gas storage facility tax
credit.
Conforming to the future repeal of the Oil and Gas Tax
Credit Fund and conforming repeals. Effective the
later of Jan. 1, 2022, or when there are no
outstanding applications for credit refunds.
Section 5 Amends AS 43.55.023(c), Oil and Gas
Production Tax, Tax credits for certain losses and
expenditures.
Credits earned under this section may be applied
against prior-year taxes, interest, penalties or fees
related to the oil and gas production tax, providing
those liabilities have not been subject to an
administrative proceeding or litigation. Credits may
not be used against conservation surcharges or the
private royalty tax. Effective immediately.
Section 6 Amends AS 43.55.023(d), Oil and Gas
Production Tax, Tax credits for certain losses and
expenditures.
Cash payments for credits under this section are
available only for work performed before Jan. 1, 2018.
Section 7 Amends AS 43.55.023(d), Oil and Gas
Production Tax, Tax credits for certain losses and
expenditures, as amended by Sec. 6.
Conforming to the future repeal in Sec. 31 of the Oil
and Gas Tax Credit Fund. Effective the later of Jan.
1, 2022, or when there are no outstanding applications
for credit refunds.
Section 8 Amends AS 43.55.023(e), Oil and Gas
Production Tax, Tax credits for certain losses and
expenditures.
Transferrable tax credit certificates issued under
this section may be applied against prior-year taxes,
interest, penalties or fees related to the oil and gas
production tax, providing those liabilities have not
been subject to an administrative proceeding or
litigation. Credits may not be used against
conservation surcharges or the private royalty tax.
Effective immediately.
Section 9 Amends AS 43.55.023(g), Oil and Gas
Production Tax, Tax credits for certain losses and
expenditures.
Conforming to the future repeal in Sec. 31 of the Oil
and Gas Tax Credit Fund. Effective the later of Jan.
1, 2022, or when there are no outstanding applications
for credit refunds.
Section 10 Amends AS 43.55.025(a), Oil and Gas
Production Tax, Alternative tax credit for oil and gas
exploration.
Credits under this section for work done on or after
July 1, 2016, may be applied against corporate income
taxes. Effective immediately.
Section 11 Amends AS 43.55.025(a), Oil and Gas
Production Tax, Alternative tax credit for oil and gas
exploration, as amended by Sec. 10.
Conforming to the sunset of the AS 43.55.025(a)(4)
credit after Jan. 1, 2018, in Sec. 12.
Section 12 Amends AS 43.55.025(b), Oil and Gas
Production Tax, Alternative tax credit for oil and gas
exploration.
The 40% credit for seismic work under AS
43.55.025(a)(4) will not be available for work done
after Jan. 1, 2018.
Section 13 Amends AS 43.55.025(f), Oil and Gas
Production Tax, Alternative tax credit for oil and gas
exploration.
Exploration credits under AS 43.55.025 for work done
after July 1, 2016, against corporate income taxes.
Effective immediately.
Section 14 Amends AS 43.55.025(g), Oil and Gas
Production Tax, Alternative tax credit for oil and gas
exploration.
Exploration tax credits under this section that are
transferred to another taxpayer may not be applied
against the purchaser's corporate income taxes.
Effective immediately.
Section 15 Amends AS 43.55.025(h), Oil and Gas
Production Tax, Alternative tax credit for oil and gas
exploration.
Tax credit certificates and tax credits under this
section may be applied against prior-year taxes,
interest, penalties or fees related to the oil and gas
production tax, providing those liabilities have not
been subject to an administrative proceeding or
litigation. Credits may not be used against
conservation surcharges or the private royalty tax.
Effective immediately.
Section 16 Amends AS 43.55.025(i), Oil and Gas
Production Tax, Alternative tax credit for oil and gas
exploration.
Exploration credits issued under this section for work
done after July 1, 2016, may be used against corporate
income tax, but may not be used to reduce corporate
income taxes below zero. Effective immediately.
Section 17 Amends AS 43.55.025(k), Oil and Gas
Production Tax, Alternative tax credit for oil and gas
exploration.
Conforming to the sunset of the seismic credit in Sec.
12.
Section 18 Adds a new subsection to AS 43.55.025, Oil
and Gas Production Tax, Alternative tax credit for oil
and gas exploration.
Creates a conditional tax credit certificate that the
Department of Revenue must issue to explorers. The
conditional certificate enables the holder to submit
an application for a refund while waiting for the
state to issue a transferrable certificate, but the
conditional certificates may not be purchased by the
state. Effective immediately.
Section 19 Amends AS 43.55.028(a), Oil and Gas
Production Tax, Oil and gas tax credit fund
established; cash purchase of tax credit certificates.
As of Jan. 1, 2018, the tax credit fund is only able
to purchase oil and gas tax credits issued for work
done before Jan. 1, 2018, and to purchase instate
refinery and LNG storage facility income tax credits.
Section 20 Amends AS 43.55.028(e), Oil and Gas
Production Tax, Oil and gas tax credit fund
established; cash purchase of tax credit certificates.
Allows the Department of Revenue to accept, but not
purchase, a conditional certificate from an explorer.
Effective immediately.
Section 21 Amends AS 43.55.028(e), Oil and Gas
Production Tax, Oil and gas tax credit fund
established; cash purchase of tax credit certificates,
as amended by Sec. 20.
Conforming to the Sec. 19 provision ending new entries
to the credit purchase program Jan. 1, 2018.
Co-Chair MacKinnon wondered whether Section 21 was
conforming language to Section 19. Ms. Cramer replied in
the affirmative.
Section 22 Amends AS 43.55.029(a), Oil and Gas
Production Tax, Assignment of tax credit certificate.
Conforming to the Sec. 30 repeal of the net operating
loss credit.
2:34:03 PM
Ms. Cramer continued to discuss the Sectional Analysis:
Section 23 Amends AS 43.55.160(d), Oil and Gas
Production Tax, Determination of production tax value
of oil and gas.
Conforming to the Sec. 30 repeal of the net operating
loss credit.
Section 24 Amends AS 43.55.160(e), Oil and Gas
Production Tax, Determination of production tax value
of oil and gas.
North Slope and Middle Earth lease expenditures may be
used to establish a carried-forward annual loss. Gross
value reductions for new oil cannot make a loss larger
than it would otherwise be. Also, makes conforming
changes to the Sec. 30 repeal of the net operating
loss credit and the Sec. 25 terms for lease
expenditures.
Section 25 Amends AS 43.55.165(a), Oil and Gas
Production Tax, Lease expenditures.
Lease expenditures include those, for the North Slope
and Middle Earth, that were unable to be deducted in
the previous year.
Section 26 Amends AS 43.55.165(f), Oil and Gas
Production Tax, Lease expenditures.
Conforming to the Sec. 30 repeal of the net operating
loss credit.
Section 27 Adds a new paragraph to AS 43.55.165(l),
Oil and Gas Production Tax, Lease expenditures.
Defines "carried-forward annual loss" as a loss
established per Sec. 25.
2:37:02 PM
Ms. Cramer continued to discuss the Sectional Analysis:
Section 28 Adds new subsections to AS 43.55.165, Oil
and Gas Production Tax, Lease expenditures.
Implements new terms for how a carried-forward annual
loss is applied. A taxpayer may choose to apply all or
some of its loss, or to carry it forward. In applying
carry-forward annual losses, a producer subject to the
minimum tax may apply the amount that would reduce
taxes to the equal amount under the minimum tax, and
not to zero. Carry-forward annual losses in excess of
the amount applied to reduce taxes to the equal of the
minimum tax are carried forward.
Fifty percent of carry-forward annual losses incurred
from a lease or property not yet in production may be
used immediately; the remaining 50% may be used once
the lease or property enters regular production, as
determined by the Alaska Oil and Gas Conservation
Commission.
Section 29 Amends AS 43.55.170(c), Oil and Gas
Production Tax, Adjustments to lease expenditures.
Conforming to the Sec. 30 repeal of the net operating
loss credit.
Section 30 Repealer
Repeals the net operating loss credit, AS
43.55.023(b), on Jan. 1, 2018.
Section 31 Repealer
At the later of Jan. 1, 2022, or when all outstanding
applications for credit refunds have been paid,
repeals the Oil and Gas Tax Credit Fund and AS
43.55.028; assignability of credits to third parties,
AS 43.55.029; and makes conforming repeals in sections
of statute referencing the fund: AS 43.05.230(l),
Administration of Revenue Laws, Disclosure of tax
returns and reports, annual disclosure of
disbursements from the fund; AS 43.20.046(e), Alaska
Net Income Tax Act, Gas storage facility tax credit,
use of fund to pay the credit; AS 43.20.047(e), Alaska
Net Income Tax Act, Liquefied natural gas storage
facility tax credit, use of fund to pay the credit;
and AS 43.20.053(e), Alaska Net Income Tax Act,
Qualified in-state oil refinery infrastructure
expenditures tax credit, use of fund to pay the
credit.
2:38:55 PM
Ms. Cramer continued with the Sectional Analysis:
Section 32 Applicability
Credits under AS 43.55.025 may be applied against
corporate income taxes by the company that incurred
the credits, regardless of when the credits were
earned. Effective immediately.
Section 33 Applicability
Credits may be applied against prior year oil and gas
tax liabilities, regardless of when the credits were
earned. Effective immediately.
Section 34 Applicability
The new provisions related to lease expenditures apply
to lease expenditures incurred on or after Jan. 1,
2018.
Section 35 Transition language
Interest rates charged on delinquent taxes for
calendar year 2017 are the rates in statute before the
changes in Sec. 2 take effect on Jan. 1, 2018.
Section 36 Transition language
Ensures the public disclosure of tax credit refund
recipients is made on April 30 of the year following
the year in which the Oil and Gas Tax Credit Fund is
repealed, as the public disclosure is also repealed to
conform. Effective the later of Jan. 1, 2022, or when
there are no outstanding applications for credit
refunds.
Section 37 Transition language
Taxpayers who incur a loss before Jan. 1, 2018, remain
eligible for the net operating loss credit in current
statute that is repealed as of Jan. 1, 2018.
Section 38 Transition language
When the Oil and Gas Tax Credit Fund is repealed after
outstanding applications have been paid, any balance
of the fund lapses into the general fund. Effective
the later of Jan. 1, 2022, or when there are no
outstanding applications for refunds.
Section 39 Transition language
Dept. of Revenue may adopt regulations retroactively.
Effective immediately.
Section 40 Conditional effect, notification language
Sections related to the repeal of the Oil and Gas Tax
Credit Fund take effect only after the Commissioner of
Revenue notifies the revisors when there are no
outstanding applications for the purchase of tax
credits, and it has been at least one year since an
application has been received. Effective immediately.
Section 41 Effective date
Sets an immediate effective date for sections related
to the ability to use Middle Earth exploration credits
against the company's own corporate income tax
liability, and to use credits against prior year tax
liabilities that have not been subject to an
administrative proceeding or to litigation.
Section 42 Effective date
Sets a Jan. 1, 2018, effective date for Section 25,
which is treated separately because it makes changes
to a section of statute that is undergoing other
changes this year based on House Bill 247 of 2016.
Section 43 Effective date
Sets an effective date of the later of Jan. 1, 2022,
or Jan. 1 of the year in which notice is provided that
all outstanding applicants for credit purchases have
been paid, for the repeal of the Oil and Gas Tax
Credit Fund and conforming sections.
Section 44 Effective date
Sets a Jan. 1, 2018 effective date for all other
sections.
2:42:47 PM
Co-Chair MacKinnon WITHDREW her OBJECTION. There being NO
further OBJECTION, the proposed committee substitute was
adopted.
2:43:05 PM
AT EASE
2:44:01 PM
RECONVENED
2:44:09 PM
Co-Chair MacKinnon announced that amendments should be
submitted by 8am the following day, because she intended to
move the bill from committee the following day. She stated
that there would be a fiscal note presentation at that
meeting.
CSHB 111(FIN)(efd fld) was HEARD and HELD in committee for
further consideration.
2:45:32 PM
AT EASE
2:48:25 PM
RECONVENED
SENATE BILL NO. 34
"An Act relating to the implementation of the federal
REAL ID Act of 2005; and relating to issuance of
identification cards and driver's licenses; and
providing for an effective date."
2:48:34 PM
Co-Chair MacKinnon announced the history of the bill in the
committee.
Vice-Chair Bishop MOVED to ADOPT the committee substitute
for SB 34, Work Draft 30-GS1781\T (Martin, 5/11/17).
Co-Chair MacKinnon OBJECTED for discussion.
2:49:42 PM
JULI LUCKY, STAFF, SENATOR ANNA MACKINNON, remarked that
the CS was drafted because of various discussions.
Ms. Lucky addressed the Sectional/Explanation of Changes
(copy on file):
Section 1: NEW: Intent language added by the
legislature should continue efforts to amend the REAL
ID Act to protect the privacy of Alaskans.
Section 2: AMENDED: Amends 18.65.310(a) to set the fee
for REAL ID compliant identification cards at $20 -
increased from $10 in the previous bill.
Section 3: NEW: Amends 18.65.310(b) to require an
application for an identification card to include a
provision that the applicant understands the options
between the identification card types and what type of
card is being selected.
2:53:23 PM
AT EASE
2:53:30 PM
RECONVENED
Ms. Lucky continued to discuss the changes:
Section 4: AMENDED: Adds new sections to 18.65.310 as
follows: (m) Requires the department to adopt
regulations to issue federally compliant cards and
requires an applicant to specifically choose one. New
language in CS limits the documents that can be
copied/scanned and retained to the minimum of what is
required by REAL ID and codifies the retention period
of 15 years, which matches what is currently in
regulation.
(n) Requires the state to continue to offer non-
compliant cards. Requires an applicant to specifically
choose a federally compliant identification card. The
CS keeps the prohibition against the state or
municipality requiring a person to get a federally
compliant identification card, but allows an exception
when the state or municipality is acting as an
employer and the job duties require use of a compliant
identification card.
New language regarding non-compliant identification
cards limits retention of facial images to 15 years,
prohibits retention if a card is not issued, and
limits retention of verification documents to a year
after the expiration date of the license.
(o) The previous bill allowed the department to issue
a card with a validity of less than eight years if it
matches the amount of time that a person is legally
authorized to be in the country. The CS contains that
language, but amends a provision regarding a card
issued to a person that is legally allowed to stay in
the country for an "indefinite period." The CS allows
the department more discretion to renew for a period
of "up to eight years" - the previous bill limited the
card to one year.
The CS also includes language regarding when an
identification card can be renewed and guidelines for
renewal by mail or via the department's website. The
CS also allows the department more discretion with the
expiration date for a card when the authorized stay of
an individual is indeterminate - the previous bill
required a one year expiration date; the CS allows a
card to be valid "up to eight years."
(p) Requires the department to provide the public with
information about the differences between current
cards (non-compliant) and federally compliant cards,
including what a federally compliant identification
card is required for and what alternatives are
available.
REMOVED: Requirement that a non-compliant card be
created in-state.
(q) Definition of "identification card that is
federally compliant" - reworded.
Section 5: AMENDED: Adds new sections to 28.05.068 as
follows:
(a) If data is being shared with other entities to
comply with the REAL ID Act, limits that data to what
is required. This is similar to the intent of the
language in the previous bill, but has been reworded.
(b) - (e) - Add new language relating to the sending
of social security numbers to other entities for
verification that a person who is applying for a
driver's license is not already licensed in other
states. The language requires the department to take
"all steps necessary" to eliminate the use of social
security numbers, otherwise to limit the number of
digits of a social security number being used. Allows
up to five digits, which is the current number
required by the S2S verification system, to be used as
long as efforts have been made to reduce the number.
(f) Requires an annual report of the efforts made in
(b) - (e); this section is repealed in 2021 by section
15 of this bill.
Section 6: AMENDED: Adds new sections to 28.15.041,
relating to driver's licenses, to mirror the
provisions in section 4 of the bill for identification
cards. Specifically:
(d) Requires the department to adopt regulations to
issue federally compliant driver's licenses. New
language in CS limits the documents that can be
copied/scanned and retained to the minimum of what is
required by REAL ID and codifies the retention period
of 15 years, which matches what is currently in
regulation.
(e) Requires the state to continue to offer non-
compliant licenses. Requires an applicant to
specifically choose a federally compliant license. The
CS keeps the prohibition against the state or
municipality requiring a person to get a federally
compliant driver's license, but allows an exception
when the state or municipality is acting as an
employer and the job duties require use of a compliant
license.
New language regarding non-compliant driver's licenses
limits retention of facial images to 15 years,
prohibits retention if a license is not issued, and
limits retention of verification documents to one year
after the expiration date of the license.
(f) Requires the department to provide the public with
information about the differences between current
driver's licenses (non-compliant) and federally
compliant licenses, including what a federally
compliant identification card is required for and what
alternatives are available.
Section 7: AMENDED: Adds a new subsection to
28.15.061(b) that mirrors the language for
identification cards in section 3. Requires an
application for a driver's license to include a
provision that the applicant understands the options
between the driver's license types and what type of
license is being selected.
Section 8: Amends 28.15.101 (a) to extend the validity
of a driver's license to eight years (from five). Same
as previous bill.
Section 9: AMENDED: Amends 28.15.101 (d), similar to
the provisions in section 4, subsection (o) of this
bill, to allow the department to issue a driver's
license with a validity of less than eight years if it
matches the amount of time that a person is legally
authorized to be in the country and also repeals
language allowing a person to renew their license for
free if the license was valid for less than the
maximum.
The CS contains that language, but amends a provision
that limits the validity of a driver's license issued
to a person that is legally allowed to stay in the
country for an "indefinite period." The CS allows the
department more discretion to renew for a period of
"up to eight years" - the previous bill limited the
card to one year.
3:01:23 PM
Ms. Lucky continued to highlight the changes:
Section 10: AMENDED: Amends 28.15.111(a) to update the
security requirements of cards to the highest security
standards available.
Section 11: AMENDED: Adds new subsections to 28.15.111
that (d) prohibit bulk sharing of facial images
captured during the application process for driver's
licenses, other than commercial driver's licenses,
with entities outside the state; and (e) require a
commercial driver's license to be federally compliant.
REMOVED: Limitations on copying and retention of
application documents and facial images - see new
language on same topic in section 6. Also removed was
the requirement that a non-compliant driver's license
be created in-state.
Section 12: Amends 28.15.271(b) to charge a $20 fee
for a driver's license that is federal compliant. Same
as previous bill.
Section 13: AMENDED: Adds a new subsection to
28.90.990(a) to define "driver's license that is
federally compliant" - this was reworded in the CS.
Section 14: NEW: Repeals AS 44.99.040(a)(2), the
statute that prohibits use of assets to implement the
REAL ID Act. The previous bill amended this section
instead of repealing it.
Section 15: NEW: Repeals 28.05.068(f) - the reporting
requirement added by section 5 of this bill - on June
30, 2021.
Section 16: Transitional Provisions: Allows the
Department of Administration to adopt regulations to
implement this Act.
Section 17: Immediate effective dates for section 14
(repeal) and section 16 (authority for regulations).
Section 18: Effective date of January 1, 2019 for the
remainder of the bill.
Co-Chair MacKinnon WITHDREW her OBJECTION. There being NO
further OBJECTION, the proposed committee substitute was
adopted.
Senator von Imhof noted that the bill stated that non-
compliant identification cards would limit retention of
facial images to 15 years. She wondered what changed from
the previous presentation about not retaining facial
recognition.
3:05:55 PM
MARLA THOMPSON, DIRECTOR, DIVISION OF MOTOR VEHICLES (DMV),
DEPARTMENT OF ADMINISTRATION (via teleconference),
understood the that Senator von Imhof was concerned about
the retaining of an image for one year after expiration.
Senator von Imhof noted that initially the bill did not
allow any retention of documents or facial recognition. She
noted that the new bill allowed for significant retention.
She queried the circumstances that contributed to the
change in the bill.
Co-Chair MacKinnon queried the DMV's current practice. Ms.
Thompson replied that the DMV currently retained documents
for 15 years, which was the minimum. She stated that the
change in the legislation was from a request from
Department of Public Safety (DPS).
Co-Chair MacKinnon noted that the initial bill presentation
from the Senate State Affairs committee had document
disposal. She stressed that it was never state law to
destroy the documents. Ms. Thompson agreed.
Senator von Imhof wondered whether the DMV retained copies
of a person's passport and/or birth certificate. Ms.
Thompson responded in the affirmative.
Senator von Imhof understood that DMV did not take copies
of those documents. She requested confirmation that the DMV
retained copies of the documents. Ms. Thompson replied that
the DMV retained copies of the documents.
3:10:24 PM
Senator Hughes felt that the bill had stronger
confidentiality provisions than the federal provisions. She
wondered whether the photos were shared with any other
state agencies. Ms. Thompson replied that the photos were
only shared with DPS.
Senator Hughes wondered whether personal information was
shared with a national database. Ms. Thompson responded
that the DMV shared information with other states to
produce the most valid identification possible. She
stressed that documents and photos were not shared, but
only validation.
Senator Hughes wondered whether personal information was
downloaded into the database, or was there only a search of
the database for a match. Ms. Thompson replied that the
search was only conducted based on the provided information
to determine matches.
Senator Hughes surmised that the information would not be
shared on federally noncompliant licenses. Ms. Thompson
replied that the compliant licenses required a validation
was secure.
Senator Hughes wondered whether there was an issue with
identity theft. Ms. Thompson replied in the negative.
Senator Hughes wondered whether the five to eight years
related to both the compliant and noncompliant licenses.
Ms. Thompson replied in the affirmative.
3:17:07 PM
DAN LOWDEN, CAPTAIN, ALASKA STATE TROOPERS (via
teleconference), announced that he was available for
questions. He remarked that he was slightly confused with
the conversation related to the databases.
3:18:05 PM
SHELDON FISHER, COMMISSIONER, DEPARTMENT OF ADMINISTRATION
(via teleconference), remarked that the bill was designed
to give a person a choice between a compliant and
noncompliant license. He stated that the database shared
minimal information to allow confirmation of license
information across states to ensure that individuals had an
appropriate record in another state. He stressed that the
other information was kept in the state, and the Real ID
database only confirmed the validity of the documents.
Senator Hughes queried what was shared in the database.
Commissioner Fisher replied that the five digits of social
security information was in the database, but would work to
reduce or eliminate that number. He stated that the number
was shared to determine whether an individual had a license
in another state. The primary documents, such as a passport
or birth certificate, was not shared in the database.
Senator Hughes wondered whether there was a concern about a
breach in the database. Commissioner Fisher replied that we
should be concerned about identity theft. He felt that the
nature and amount of information was relatively modest.
Senator Hughes asked whether the commander of the military
bases in Alaska decided whether a federal compliant license
was required, or could a noncompliant license be chosen.
Commissioner Fisher understood that the commander had a
certain amount of latitude in implementation.
Vice-Chair Bishop remarked that the Department of Military
and Veterans Affairs (DMVA) had announced that a compliant
ID would be required for base access.
3:23:58 PM
BRIAN DUFFY, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF MILITARY AND VETERANS AFFAIRS (via
teleconference), announced that that the commanders were
currently complying with federal law, and did not have
waiver authority.
Senator Hughes felt that there was misinformation. She
surmised that the commanders did not have leeway. Mr. Duffy
replied in the affirmative.
Co-Chair MacKinnon shared a document from a commander that
stated that the bases must comply with the federal law.
Senator Micciche wondered whether the noncompliant Alaska
IDs would present additional risks. Commissioner Fisher
replied in the negative.
Senator Micciche surmised that the database was managed by
a private company. Commissioner Fisher stated that the DMV
would validate a passport through a database that was
managed by Homeland Security. The DMV validated a birth
certificate that was managed by a nonprofit managed
database.
3:29:52 PM
Senator Micciche wondered whether there were additional
requirements for a compliant ID beyond what was required to
receive a passport. Commissioner Fisher replied in the
negative.
Co-Chair MacKinnon wondered whether the data on the facial
image would be shared with anyone. Commissioner Fisher
replied that the facial image data would not be shared.
Co-Chair MacKinnon asked whether law officers outside of
the state could subpoena that information. Commissioner
Fisher replied that the data would be shared with DPS, and
the DMV would comply with a subpoena.
Co-Chair MacKinnon wondered whether the facial image data
was shared on an individual basis. Commissioner Fisher
replied that the state would share the facial images with
DPS, but there was no bulk sharing.
Co-Chair MacKinnon queried a regulation that required the
scanning and storage of the documents. Commissioner Fisher
deferred to Ms. Thompson.
Ms. Thompson replied in the affirmative, and deferred to
Mr. Stanker.
3:34:52 PM
MICHAEL STANKER, ATTORNEY, DEPARTMENT OF LAW (via
teleconference), stated the statute did not explicitly
mention the storage or retention of the source documents,
but the source documents were considered as part of the
application.
Senator von Imhof wondered whether the noncompliant and
compliant requirements would retain a social security
document in storage. Mr. Stanker replied that the
regulations under Real ID would take a copy of the social
security card, but Alaska regulation did not allow for
scanning of the card-only verification.
Co-Chair MacKinnon asked for confirmation of those
comments. Ms. Thompson stated that social security card
would not be scanned, and only validated.
Co-Chair MacKinnon wondered if there would be a change. Ms.
Thompson replied in the negative.
Co-Chair MacKinnon surmised that there would be no copy of
the social security card. Ms. Thompson agreed.
Vice-Chair Bishop wondered whether a hazardous endorsement
on a commercial driver's license (CDL) require
fingerprints. Ms. Thompson agreed to provide that
information.
Co-Chair MacKinnon announced that the bill was
controversial, and Alaskans expected their privacy to be
honored.
Co-Chair MacKinnon announced that amendments were due
following day at 8am.
SB 34 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
3:39:00 PM
The meeting was adjourned at 3:38 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 111 Work Draft version B.pdf |
SFIN 5/11/2017 9:00:00 AM |
HB 111 |
| HB 111 v B Sectional Analysis.pdf |
SFIN 5/11/2017 9:00:00 AM |
HB 111 |
| CS SB 34 v.T Explanation.pdf |
SFIN 5/11/2017 9:00:00 AM |
SB 34 |
| SB 34 CS SB 34 v.T.pdf |
SFIN 5/11/2017 9:00:00 AM |
SB 34 |
| SB 34 Air Force Letter - Real ID.pdf |
SFIN 5/11/2017 9:00:00 AM |
SB 34 |
| HB 111 Public Testimony Letters 4.pdf |
SFIN 5/11/2017 9:00:00 AM |
HB 111 |